Size matters: Can a 600-sq-ft house turn into a bigger unit?

Vandana Ramnani,
Noida

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Updated: Apr 04, 2013 01:56 IST

The National Capital Region Planning Board (NCRPB) had given the go-ahead to the Master Plan 2021 submitted by the Greater Noida Authority last year, but buyers in the controversy-generating Noida Extension continue to be short-changed. Their woes began when the Supreme Court struck down the acquisition of 156 hectares in Noida Extension as illegal way back in 2011, but now, when builders have begun work on projects, a number of issues are cropping up which indicate that the buyers’ troubles are far from over.

Take the case of Mukesh Sharma who invested in a 600-sq-ft apartment in Rudra’s Palace Heights in Noida Extension, now Noida West. He had already paid up 20% when earlier this month the developer scrapped plans for the apartment, which had been sold for R1900 per sq ft. Sharma received a letter offering him a unit of size 1405 sq ft at the new rate of R3050. “They are now asking me to buy the extra 800 sq ft at the current rate. This is beyond my budget of R11.5 lakh. The 1405-sq-ft apartment will cost me over R36 lakh. I simply cannot afford it,” says Sharma.

When HT Estates approached Mukesh Khurana, managing director, Rudra Buildwell Realty Pvt Ltd, he said apart from the 30-odd buyers who had refused their offer, others who had initially booked the 600-sq-ft units had been ‘adjusted’ and given the option of 985-sq-ft and 1360-sq-ft units in the Palace Heights project. “We have also given buyers the option to shift to our 475-sq-ft and 685-sq-ft units available in our Yamuna Expressway project called SkyWalk. Once the FAR is revised from 2.75 to 3.5, we are also planning to launch a tower with units of 750 sq ft in Noida Extension to accommodate these buyers and hope to hand over possession within 36 months.”

People in another project in Noida Extension allege that they are being made to sign on an addendum, an addition to the allotment agreement, that includes a new escalation clause. “The allottee agrees and gives his/her unconditional consent that if there is an increase/decrease in the price of the construction materials and/or labour cost (hereafter referred to as escalation charges) during the course of construction, then the same shall be paid by the allottee to the company over and above the allotted amount,” it says. (See copy of the agreement above).

Upgrading to a bigger unit is not admissible under law, says Pankaj Bajaj, president, Confederation of Real Estate Developers Associations of India, CREDAI NCR. “The builder needs to honour the original allotment. Variation in size, too, cannot be more than 10% but that needs to be done at the old rate,” he says.

Referring to the addendum, he says a new possession date for completion of the project is fine if one takes into account delays which were beyond a builder’s control, such as litigation related to a project etc. In such a case, builders and buyers should mutually agree to an extended date. However, under the CREDAI code of conduct no hidden/new conditions should be sprung on the buyer at a later stage, especially after the booking has taken place. The builder cannot come up with new terms and conditions at this stage.

If the builder has not shifted the buyer to an alternative site after the Supreme Court struck down the acquisition of 156 hectares in Noida Extension as illegal, it is not a “serious” issue as he is not duty bound to do so if the said land does not exist after being taken away, points out Bajaj. It’s not mandatory for him to transfer buyers to the alternative site as he may have a different financial arrangement with it. That’s not unethical behaviour as long as he is returning the booking amount with interest. If some builders have adjusted their buyers, that’s a business call, a goodwill gesture on their part,” says Bajaj.

S K Pal, advocate, Supreme Court, points out that under the UP apartment act, possession should be handed over to the buyer two years from the date of signing the agreement. The time consumed in the legal battle should be adjusted and a new date for possession should be given.

Also, under the law a developer cannot scrap a scheme after valid allotment is done and money has been collected for it. Shifting a buyer to a different, bigger unit is unethical and grossly illegal as per statutory provisions.However, beleaguered Noida Extension buyers still have some hope after Greater Noida Authority chief Rama Raman’s meeting with them and builders in the area last week. He had assured the buyers that all of their issues would be taken care of. “It was decided that builders should address specific complaints of the buyers and settle their issues,” says Raman.